What will you learn about in this annuity review?In this review of the Minnesota Life SecureOption Choice 3 Year annuity, we will be discussing the following information:
- Annuity type
- Pros and cons
- How an advisor might present the annuity
- Where it may fit well
- Where it may not be a very good fit
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.The purchase of any type of financial product can be a major decision. This is particularly the case, though, when it is something that your retirement lifestyle can depend upon such as an income annuity. For instance, the right annuity can provide you with a nice, steady stream of guaranteed income that you can count on for a set period of time – or even for the remainder of your lifetime, no matter how long that may be. On the other hand, if you end up choosing an annuity – or for that matter, any financial-related product – that really doesn’t fit your particular needs, then it could have a negative impact on your retirement lifestyle…and the way you live for the remainder of your life. An annuity can also usually require a fairly large chunk of your retirement savings. And, because most annuities have surrender penalties for withdrawing your funds – some for more than ten years – it can cost you dearly if you purchase an annuity and then soon afterward determine that a different product would be better. Annuities can be somewhat confusing to understand – even for well-educated consumers (as well as for some financial and insurance advisors). As “new and improved” annuities hit the marketplace, there can be a plethora of “small print” that comes along with these vehicles, sort of like an owner’s manual. But have you (or anyone you know, for that matter) ever really sat down and read an owner’s manual word for word? The answer is likely no. The “small print” that is associated with almost any product or service can oftentimes seem a bit daunting. Therefore, most people will simply move forward with their purchase, and hope that everything turns out ok. When it comes to your future income, though, hope is definitely not the best strategy. That’s where Annuity Gator can help.
Annuity and Retirement Income Planning Information That You Can Actually TrustIf you have never been to our website before, please allow us to officially welcome you here to Annuity Gator. Who exactly are we? At Annuity Gator, we are a team of experienced financial and annuity professionals who focus on providing in-depth, and unbiased, annuity reviews on the Internet. We have been at this for quite a while now – far longer than our competitors have – even though there are now a number of “copycat” websites that are popping up. (Imitation is a form of flattery, isn’t it?!) It is our mission to provide in-depth information and reviews about annuities to consumers – as well as to financial professionals – so that they know exactly what they may (or may not!) be getting into when considering and/or selling an annuity. These products can be highly complex, so it helps to have someone who is adept in how annuities work, and who can pare down the massive amount of “fine print” into something that is more easily understood. That’s where Annuity Gator comes in! When looking for annuity information online, it is essential that you know who is trying to provide education on the products, and who is simply trying to sell you something…regardless of whether or not it is the right financial vehicle for you. It’s easy to be lulled into some of the other websites out there in cyberspace – especially when they make bold claims, like:
- Lowest fees
- High income
- Top-rated annuity carriers
- Income stream for life
The Minnesota Life SecureOption 3-Year Annuity at a Glance
|Product Name||SecureOption 3|
|Issuer||Minnesota Life / Securian Financial|
|Type of Product||Fixed / MYGA (Multi-Year Guarantee Annuity)|
|A.M. Best Rating (Securian Financial)||A+ (Superior)|
|Phone Number||(833) 810-8266|
Opening Thoughts on the Minnesota Life/Securian Financial SecureOption 3 Year AnnuityIn 2018, Minnesota Life Insurance company adopted its parent company’s brand, Securian Financial. From Minnesota Mutual to Minnesota Life, to Securian Financial, though, it is still the same company that has been in business for roughly 140 years. The insurance and annuity plans that are issued will still be issued by Minnesota Life Insurance Company or Securian Life Insurance Company – both highly rated insurers by the insurance carrier rating agencies. As of year-end 2019, Minnesota Life Insurance Company held in excess of $56.3 billion, while Securian Financial Group stood at over $63 billion in assets. Both companies are considered to be strong and stable financially, and both have positive reputations for paying out their policyholders’ claims. Over the past several years, due in large part to the continuous ups and downs of the stock market, the demand for fixed and multi-year guarantee (MYGA) annuities have increased substantially. One of the primary reasons for this is because, in addition to keeping principal safe (in any market condition), these financial vehicles can also provide you with the opportunity for guaranteed growth for a set period of time, as well as a set amount of income that could last you for the remainder of your lifetime. Yet, even though this might sound like a win-win-win situation, the reality is that if something sounds like it may be “too good to be true,” then it typically is – so you should ideally get as much in-depth detail as possible if you are considering committing to it for the long term.
Before we get into the gritty details, here are some necessary legal disclosures…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Neither Minnesota Life Insurance Company nor Securian Financial Group have endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Before purchasing any type of insurance and/or investment product, it is important that you do your own due diligence, and that you consult a properly licensed professional if you should have any specific questions that relate to your individual situation. All of the names, marks, and materials that were used for this annuity review are the property of their respective owners. For more information on how to compare annuities in order to determine which one may be the best for you and your financial circumstances, click here to obtain our free annuity report.
How the SecureOption Choice Annuity is DescribedThe SecureOption Choice annuity is described as a multi-year guaranteed annuity, or MYGA, that provides competitive rates, along with some attractive liquidity features, and a wide range of guarantee periods. (In the case of the SecureOption Choice 3, the rate is guaranteed for a full three years – regardless of what happens in the marketplace). As a fixed deferred annuity, the funds that are inside of the SecureOption Choice 3 annuity are allowed to grow on a tax-deferred basis. This means that there are no taxes due until the time of withdrawal. The SecureOption Choice is a single premium annuity, so only one lump-sum contribution is required. This could be made via personal savings and assets, or alternatively, rolled over from an IRA or an employer-sponsored retirement plan such as a 401(k). In addition to the 3-year rate guarantee period, other choices for rate locks include 5-years, 7-years, or even 9-years. In any case, however, once the initial rate guarantee period has elapsed, the annuity will switch over to a one-year guarantee period thereafter. There are some other features on this annuity that can be attractive, such as a death benefit that will pay out the contract value to a named beneficiary – and therefore bypass probate – if the owner/annuitant passes away. You may also be allowed to take penalty-free withdrawals – even during the surrender period – if you have been diagnosed with a terminal illness or if you have to reside in a hospital or a nursing home for at least 90 days. Also, as with other annuities, there are income payout options that you can choose from, including set period payouts, or even a lifetime payout that will last for as long as you need it to. To check out the SecureOption Choice annuity information on the Securian Financial Group’s website, you can go here. Is an annuity right for you? That depends. But don’t make a costly financial mistake before reading our Annuity Buyers Guide.
How an Insurance or Financial Advisor Might “Pitch” the SecureOption Choice 3 AnnuityIf you are approaching retirement, you may be torn between going with financial vehicles that have more risk in order to increase your opportunity for growth, or instead going with something “safe” so that you don’t lose any of your hard-earned retirement funds. Because many retirees and pre-retirees today are concerned about not losing what they’ve already saved, having certain guarantees can be somewhat comforting – so if you have been presented the SecureOption Choice 3 annuity by your insurance or financial advisor, it is likely that they keyed in on the safety features of this product. In fact, once you have locked into the rate guarantee – in this case, for three years – even if interest rates plummet in the near future, you will still have security in knowing that your rate will remain the same for a set period of time. With that in mind, in many ways, this annuity can allow you to potentially increase the returns on your “safe money” – especially considering the tax-deferred growth. But even so, there are still some fairly significant tradeoffs that you need to be mindful of. For example, even though you can earn a guaranteed, locked-in rate on this annuity, the reality is that you still may not be able to beat, or even meet, the rate of inflation. Therefore, even though your rate won’t decline during the guarantee period, you will be hit with a surrender penalty if you take more than 10% of your money out in any given year (during the surrender period) if another, more lucrative financial opportunity comes along. (This is definitely a situation where lost opportunity cost can abound!) So, on the one hand, while it might be nice knowing how much you’re going to earn in the next few years, what happens if interest rates go up? In this case, you’d be left behind, earning a lower rate for the remainder of the guarantee period! Also, once your initial guarantee period ends, your rate is only guaranteed for one-year periods going forward. This could be unfortunate, too – especially if rates spike up for a while and you want to capture them on the upswing. And then there are the potential fees….
Fees Associated with the Minnesota Life/Securian SecureOption 3 AnnuityWhile fixed annuities don’t necessarily always deduct an up-front sales commission, most all annuities will impose some sort of withdrawal or surrender penalty if you cancel the contract, or even take out more than a certain percentage of your funds in any given year. In the case of the SecureOption 3 annuity, there is an initial three-year surrender charge period. So, in Year 1, if you access more than 10% of the contract’s value, you will also owe a surrender charge of 9%. This amount gradually grades down to 8% in Year 2, and 7% in Year 3, before finally going to 0% in Year 4. In addition to a possible surrender fee, you could also owe taxes, and you could incur an additional 10% “early withdrawal” penalty from the IRS if you make withdrawals prior to turning age 59 ½. So, it is really important to consider this a long-term financial commitment. It is also important to note that if you purchase the SecureOption 5, 7, or 9 – which have rate lock periods of 5, 7, and 9 years respectively – the surrender period corresponds with the rate guarantee period. So, the 5-year option will have a 5-year surrender period, and so on.
The Annuity Gator’s End Take on the SecureOption 3 Annuity from Minnesota Life/Securian Financial GroupWhere this annuity works best: Just like all product or service offerings, there will usually be some pros and some cons with annuities, meaning that the item or service may work well for some, and not-so-well for others. So, if you are still considering the SecureOption 3-year annuity, it could work well for you if you are seeking the following benefits:
- Guaranteed growth (for a set period of time)
- Protection of principal – no matter what occurs in the stock market
- Lifetime income in retirement
- You want the opportunity to earn an even higher rate of return in order to keep better pace with future inflation
- You want to access more than just 10% of the contract’s value during the surrender period
- You do not plan to use the guaranteed lifetime income feature
In SummaryWhen you’re thinking about how to best position your savings for the future, there are a number of different factors that you should really take into account. For instance, with annuities, you will definitely need to make sure that the product allows you the opportunity to earn a nice return (at least enough to meet or beat inflation), while also keeping your money safe in any type of market environment. On top of that, if you’re seeking a future income stream – including one that you cannot outlive, regardless of how long that may be – then you also need to know how the annuity will pay out when you need to convert the funds into ongoing income. It can help, then, to conduct a bit of research on the offering insurance carrier in order to determine whether or not it is financially stable, and that it has a positive reputation for paying out its policyholders’ claims. Given all of that, if you purchase the Securian/Minnesota Life Insurance Company’s SecureOption Choice 3-year annuity, you can be assured that your money will be safe, no matter what goes on with the stock market. You can also count on an ongoing income stream down the road, which can help to alleviate the worry that most retirees (and even some pre-retirees) have about running out of money before “running out of time.” However, while this annuity can certainly provide you with some nice benefits, the reality is that it could still fall somewhat short – and quite honestly, there may very well be a better alternative out there for you. This is even more true if you are looking for a way to keep your money safe, while still having the opportunity to earn a higher rate of return. The only way to truly get an idea of how the SecureOption Choice 3 annuity may perform – based on your specific situation – is to have it tested. We can do this for you by running the numbers through our annuity calculator, and we can then provide you with a spreadsheet of the results. In order to receive this information, just simply contact us through our secure online form here and let us know.
Do You Have Any Additional Questions About the SecureOption Choice 3 Year Annuity? Are There Any Other Annuities You’d Like to Have Reviewed?While we know that this annuity review was a bit on the long side, we feel that providing “too much” information is better than not enough. That being said, we appreciate you sticking with us here to the end. We also realize that, because everyone’s situation is different, there may have been some questions that went unanswered in this review. If this is the case and you still have any additional questions or concerns, please feel free to reach out to us here. In addition, if you found this annuity review to be helpful, then please forward it on to anyone else that you think may benefit from it, as there is a lot of misconception out there about annuities and how they work. Is there any other annuity you would like to see reviewed? If so, we will get right on it! There is a myriad of annuities available in the marketplace today. So, if you don’t currently see an annuity in our online database in AnnuityGator.com that you are considering, then just let us know the name of that annuity (or the names, if there is more than just one), and our team of annuity pros will get to work on it ASAP. Best, The Annuity Gator. P.S. If you would like to read more of our Minnesota Life/Securian Financial annuity reviews here are some links to check out:
- Independent Review of the Minnesota Life SecureOption Focus Fixed Deferred Annuity.
- Independent Review of the Minnesota Life SecureOption Select 9 Annuity.
- Independent Review of the Minnesota Life SecureOption Select Fixed Deferred Annuity.
- Independent Review of the Minnesota Life SecureOption Focus 3 Annuity.